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Japan FinTech Observer #178

Norbert Gehrke

Norbert Gehrke

— 8 min read
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Japan FinTech Observer #178

Welcome to the one hundred seventy-eighth edition of the Japan FinTech Observer.

"Economists have predicted nine of the last five recessions" is a quote often attributed to Paul Samuelson. The same can be said of those forecasting a stock market crash. And more recently, of those either seeing a complete capitulation of the Japanese Yen, or even the exact opposite.

Let's remind ourselves that "Finance as Entertainment" has its place, however, if you want to have a serious market conversation, you need to offer a little more than "I see the Japanese Yen strengthening to the 120 to 130 range". At a minimum, let's talk about 3M, 6M and 12M targets, and if you were so kind, 2026/2027/2028 end of year projections. A forecast without a timeline is just a brainfart. Don't take everything you read too seriously, and do your own research!

Here is what we are going to cover this week:

  • Venture Capital & Private Markets: SBI Holdings boosts stake in Fasset, raising UAE crypto firm’s valuation to USD 1bn; SMBC Edge co-leads UnlimiTech's JPY 180m seed funding round; Kyoto Fusioneering secures JPY 25.7bn capital injection to drive global fusion infrastructure push
  • Insurance: MS&AD commits GBP 200m to Standard Life’s new pension risk transfer partnership
  • Banking: Minna no Ginko and Revolut deepen partnership to launch banking agency operations; Resona Bank partners with India’s Tata Capital to support corporate expansion
  • Payments: Digital Garage, JCB, and Lawson partner to test USDC stablecoin payments at in-store POS
  • Capital Markets: When a few stocks become the market; Smartround has completed registration as a Type 1 Financial Instruments Business Operator (Special Intermediation Services for Unlisted Securities)
  • Asset Management: Sakana AI and Daiwa Securities expand partnership to build AI tools for wealth management; L Catterton enters into strategic partnership with Japanese IFA Financial Standard
  • Digital Assets: Nomura’s Laser Digital secures approval as Japan ends four-year crypto exchange license freeze; Toyota Finance launches first self-offered security token bond via TOYOTA Wallet app
  • The Last Word: Ministry of Justice Issues New Guidelines on AI Legal Tech

Venture Capital & Private Markets

  • SBI Holdings boosts stake in Fasset, raising UAE crypto firm’s valuation to USD 1bn: Japanese financial services conglomerate SBI Holdings has announced a follow-on strategic investment in UAE-based digital asset platform Fasset; the transaction assigns Fasset an enterprise valuation of $1 billion, following SBI’s initial stake purchase in May 2026; upon completion of Fasset's ongoing Series C funding round, SBI plans to exercise warrants to make Fasset an equity-method affiliate
  • SMBC Edge co-leads UnlimiTech's JPY 180m seed funding round: The investment round, concluded in July 2026, was led by Genesia Ventures, SMBC Edge, and Delta X No. 1 Investment Limited Partnership; gounded in March 2025, UnlimiTech develops “DataFlow AI,” an AI-driven workflow platform designed to streamline operations across the manufacturing sector; the platform addresses structural labor shortages and knowledge-transfer challenges in Japanese manufacturing by digitizing legacy manual processes, such as unstandardized Excel spreadsheets, and converting implicit worker expertise into structured digital assets
  • Kyoto Fusioneering secures JPY 25.7bn capital injection to drive global fusion infrastructure push: Kyoto Fusioneering (KF), a Japanese developer specializing in essential equipment and balance-of-plant systems for commercial fusion power, announced the first close of its Series D funding round; the transaction brings in ¥16.72 billion (~$105 million) in fresh equity, alongside ¥9.0 billion (~$57 million) in new credit and loan facilities, for a total capital raise of ¥25.72 billion (~$162 million); the funding nearly doubles the startup’s equity base, bringing its total cumulative equity raised to date to ¥32.98 billion (~$207 million); existing backers SMBC Venture Capital, Kyoto Capital Partners, JIC Venture Growth Investments, Daiwa Corporate Investment, and MUFG Bank provided follow-on capital

Insurance

  • MS&AD commits GBP 200m to Standard Life’s new pension risk transfer partnership: Tokyo-listed MS&AD Insurance Group Holdings has agreed to invest up to £200 million in a new U.K.-based partnership being formed by Standard Life; the venture will focus on the Pension Risk Transfer (PRT) sector, specifically targeting large and complex U.K. defined benefit pension schemes; subject to regulatory approvals and standard procedures, the partnership is slated to complete in the first half of 2027 before writing any new business; MS&AD will join a roster of major global financial institutions and private market asset managers—including CVC Capital Partners, Prudential Financial, and Goldman Sachs—combining Standard Life's PRT expertise with institutional capital resources

Banking

  • Minna no Ginko and Revolut deepen partnership to launch banking agency operations: Digital lender Minna no Ginko, a subsidiary of Fukuoka Financial Group, has entered into a banking agency agreement with Revolut Technologies Japan, expanding their ongoing Banking-as-a-Service (BaaS) collaboration; under the terms of the agreement, Revolut Technologies Japan operates as a registered banking agency (Kanto Local Finance Bureau Director-General No. 538) with Minna no Ginko serving as the principal bank; the arrangement authorizes Revolut to act as an intermediary for opening Minna no Ginko yen ordinary and savings accounts directly within its app interface
  • Resona Bank partners with India’s Tata Capital to support corporate expansion: Resona Bank has entered into a business cooperation agreement with Mumbai-based Tata Capital Limited to bolster financial and advisory support for Japanese enterprises expanding into India; the agreement enhances Resona’s overseas strategic framework, adding Tata Capital to its network of global banking partners to meet surging client demand in India's growing economy

Payments

  • Digital Garage, JCB, and Lawson partner to test USDC stablecoin payments at in-store POS: Digital Garage, JCB, and Lawson have signed a basic agreement to conduct a proof-of-concept (PoC) for stablecoin payments at retail locations; the initiative aims to test the viability of Circle's USD Coin (USDC) for in-store transactions, focusing primarily on inbound foreign tourists; the trial is taking place at the Lawson Gate City Osaki Atrium store in Tokyo; it utilizes a Consumer-Presented Mode (CPM) system, where cashiers scan a wallet address barcode displayed on the user's smartphone; the initial test phase involves company personnel using the Base App wallet to process USDC on the Base blockchain

Economics

Capital Markets

  • In a post titled "When a few stocks become the market," the Atlantic Council discovers that over the past decade, the impact of a handful of stocks on index performance has gradually increased—and that’s not the only issue; indices are also becoming more concentrated in certain industries, such as information technology or the financial sector; this creates opportunities for higher returns, but also greater risks; Japan’s market recorded the second-largest increase in concentration over the past year; between July 2025 and July 2026, the ten largest companies’ share of the Nikkei rose from 40.9 percent to 48.7 percent, while the three largest sectors’ share rose from 63.7 percent to 70.8 percent
  • Smartround Strategic Business Preparation has completed registration as a Type 1 Financial Instruments Business Operator (Special Intermediation Services for Unlisted Securities); furthermore, the subsidiary has changed its name to "Smartround Securities Co., Ltd."; Smartround Inc., which in September 2024 formed a capital alliance with Mizuho Financial Group (Mizuho Trust & Banking), MUFJ Morgan Stanley Securities, and Nomura, with the aim of jointly building a platform to optimize secondary trading of stocks issued by unlisted startups, had previously decided to transition its subsidiary SmartRound Securities to a company with a board of directors and launch a new management structure in April 2025
  • J.P. Morgan Asset Management analyzes the "Governance Revolution in Japan"
  • Neuberger sees "A New Growth Plane for Japanese Equities"

Asset Management

  • Sakana AI and Daiwa Securities expand partnership to build AI tools for wealth management: Sakana AI and Daiwa Securities Group have advanced their joint artificial intelligence project into full-scale production, beginning development on custom AI tools designed to support wealth management operations; the move follows a proof-of-concept phase initiated under a September 2025 partnership agreement between Sakana AI and Daiwa Securities; the initial phase evaluated Sakana AI’s proprietary agent technologies—including "The AI Scientist" and "AB-MCTS"—focusing on automated market data collection and analysis
  • L Catterton enters into strategic partnership with Japanese IFA Financial Standard: Consumer-focused private equity firm L Catterton has entered into a definitive strategic capital partnership with Financial Standard, an independent financial advisor (IFA) based in Tokyo; under the agreement, L Catterton and Financial Standard's current management team will collaborate to accelerate the advisory firm's expansion in Japan's wealth management market; Financial Standard's current management structure will remain unchanged following the transaction, with existing leadership continuing to actively manage operations.

Digital Assets

Japan’s Ministry of Justice has published updated compliance guidelines regarding the deployment of artificial intelligence in corporate legal support services, providing a clarified framework on how non-lawyer service providers can offer AI-driven legal tools without violating Article 72 of the Attorney Act, which restricts the practice of law by non-attorneys.

The August 21, 2026 guidelines build upon the Ministrys August 2023 framework, addressing rapid technological advancements and rising market demand for generative AI in enterprise legal operations.

Key highlights from the Ministrys framework include:

  • Value-Neutral Service Design: Services designed for routine corporate governance, compliance, contract creation, or research are generally treated as value-neutral. They typically do not violate Article 72 unless specifically designed or marketed to manage active legal disputes.
  • The Concretely Dispute-Oriented Threshold: Providers risk non-compliance if their platform actively targets or facilitates legal representation, advice, or document drafting for cases where legal conflict is almost inevitable or already active.
  • Attributed Conduct Standard: While end-users ultimately input prompts, automated system outputs can legally be evaluated as the providers own conduct if the platform is inherently structured to deliver legal opinion or services in dispute-related matters.
  • Mandatory Governance Protocols: To maintain compliance, providers are advised to involve licensed Japanese attorneys in system architecture and quality control, display prominent disclaimers, verify user eligibility during onboarding, and restrict or terminate access for misuse.

The guidelines explicitly do not apply to legal software used directly by licensed attorneys or inside counsel reviewing outputs on behalf of their organizations. The Ministry noted that technical output restrictions remain at the discretion of providers for now, but signaled that guidelines will undergo periodic reviews as AI technology evolves.

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